First Attempt At Buying Bitcoin

With the price of bitcoin moving around like a heavily caffeinated flea, it’s pretty hard to get a solid reading on the current price. There are certainly ways to know the current value, and I have added one of those to the bottom of every page on this site just in case. But the price and the value of bitcoin isn’t always a simple concept, and buying bitcoin is apparently no more easy than you think.

Having (apparently) failed at using a credit card to buy hashrate on Hashflare, I decided that buying bitcoin and paying them directly in bitcoin would probably be a pretty good idea. Damn, I have stupid ideas! But I was getting a wee bit frantic trying to get some mining set up, and I was running out of viable options. They do take payment in bitcoin, and at the time, the $140 price (special) was equal to about 0.0014 bitcoins. For reference, that tells you the price of bitcoin at that time was $10000 USD or so. So my goal was to get out there and buy me at least that many bitcoins so I could get mining. Simple, direct, and oh so heavily misinformed!

Anyone of you experienced in the bitcoin world are either snickering or rolling your eyes around this point. My concept was logically sound for as much as I knew at that moment, as I had not discovered a couple of basic things: There is no “bank of bitcoin” to get the coin from, and even if I get it, the process to get it and then pay something with it would take a week or so, as the backlog of transactions to process in bitcoin is rather large now. So even if I succeeded, I would in many ways still be failing, albeit with a slow process to winning.

Okay, so step one, if I want to buy bitcoin, I need a wallet. So I did what every newbie in the world does and I added a bitcoin.com wallet onto my phone. I sort of realize now that it’s probably not the best way to do things, but for the moment, it’s okay. I also found that almost every seller of bitcoin also offers some version of a wallet. However, my spider sense was tingling at this concept, it seemed like a real risky concept to buy something from someone with real money and then let them hold onto it virtually for you. I’m probably not right on this, but it just didn’t feel good.

That settled, I went looking for places to buy bitcoin. What a disappointing mess this turned out to be.

First off, not everyone likes to deal with my home country. Even if you have a valid credit card, even if your credit card is in US dollars, and so on, if you are not in the right country, some of the seeming best choices for buying bitcoin are locked off and not available. The good ones tell you up front and won’t let you sign up, the sneaky ones who seem intent on spamming you like incontinent monkeys will gladly let you sign up and then disappoint you at the moment of purchase. With the exception of one site, I was unable to find a way to delete accounts created in this process. It’s a one directional hoovering, likely so they can boost up their member count and appear bigger than they really are.

The second things I came to realize really quickly was that the price of bitcoin varies wildly depending on many different things. One thing generally is the amount of BTC you are trying to obtain. As I was looking for a small amount (equal to $140 US) the service charges and admin fees were often 10% or more on a transaction. There are also sites like Local Bit Coins which are basically private sales. The prices here vary widely, and for small amounts of coin, some are looking for 100% over the true price. These are also private sales and appear to have little in the way of security or come back if things go wrong.

One place that looked promising is Coinbase (use my link code please!). They seem to be pretty straight about buying and selling at a reasonable price, although their admin fee and what not on a small amount comes out near 10%, it’s not the worst around. It’s a price I am willing to pay for what appears to be a more secure transaction. I was actually well on the way to buying when I hit a bit of a wall. It seems that their credit card processor (Simplex) has a security system that requires full disclosure of your name, address, and what not, including copy of your ID (like your passport, example). However, their form didn’t handle my country very well, and their upload system (using amazonaws) seemed to be erroring out. After a few tries and some attempts to get tech help over a 24 hour plus period, I gave up. Coinbase otherwise seems to be fairly up and up, and I do recommend them at this point. Simplex, well… we aren’t friends yet, I guess!

Other sites I checked out for buying bitcoin included Bittrex, Kraken, and Bitfinex. Bittrex seems to be as much about trading various coins as much as directly buying and selling, and seems a bit beyond my level at least for now. Kraken seems a little easier, but I seem to get a fair number of Cloudflare errors trying to reach the site at this point. Bitfinex, well, let’s see. I should have researched first, they are a company that appears to be in the middle of a serious flame war with someone, it’s up to the lawyer level and just made me feel like it’s an area I want to avoid. It’s not that they are good or bad, I just sort of met them at a bad time. I will reserve judgement until things settle back down for them.

I went through a whole bunch of other sites, there are plenty out there and many of them smell just plain scammy. It’s bad enough that I am trying to buy hashrate for a secretive company, using crypto currency that I am trying to buy from another company and a different credit card processor, but when you get to a website and you can smell the scam, you know it’s time to run. Bitcoin is still very much in it’s wild west phase (one of the reasons I think the price is nowhere near it’s peak), and there are going to be some serious disasters along the way here. Already, the MtGox disaster stands as a perfect example of what can happen in the bitcoin world, buying bitcoins isn’t as easy as you think, and keeping them isn’t that easy either!